Bob FraserCFO & Macro Strategist | Data-Driven Investing Expert | Speaker & Author

How to invest in single family rental homes? #homeownership #rentalhomes

Name: How to invest in single family rental homes? #homeownership #rentalhomes
Uploaded: 2024-10-10T14:51:36+00:00
Duration: 6 s
Channel: Bob Fraser
Description: In this short dialogue, Speaker A explains a novel single‑family rental investment product that blends the cash‑flow benefits of traditional rental…

10 Oct 2024 · 0 min

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In this short dialogue, Speaker A explains a novel single‑family rental investment product that blends the cash‑flow benefits of traditional rental properties with the characteristics of owner‑occupancy. The structure is designed so a behavioral shift—tenants treating the home as their own—creates value for both occupants and the investor pool. Speaker A notes that investors initially own 98% of the asset, gradually decreasing to 90%, allowing most of the upside from improved tenant behavior to flow back to investors. This alignment of incentives attracts both impact‑focused and market‑rate capital, as investors are drawn to the mission and the solid, predictable returns the model promises.

I'm on the journey to buy this home. I'm going to take care of it. And so net-net, that ultimately benefits the investor pool.
How would you compare this to another single-family rental fund that's just investing in rentals?
You have a cash-flowing asset because you're generating rental income, but you're marrying that rental income and cash flow with all the characteristics of owner occupancy. What we're trying to do is structure the product such that that behavioral shift ultimately benefits both parties. And because the investor owns 98%, going down to 90%, most of the benefits, they accrue back to the investor pool. You can build a mousetrap and an on-ramp and a better solution for the consumer and market rate capital, not just impact investors, but folks who look at this and go, it's actually a sound investment that's going to earn me a solid return, and therefore I'm going to put money into this. And that's what we've seen with investors coming in. You know, they like the mission, but they really like the returns because of that alignment of incentives and behavior.